Critical Illness
The insurance industry should develop a critical illness (CI) product with built-in retirement cover if it wants to save consumers from facing difficulties in old age, according to Sue Wilkinson, head of life and health propositions at Abbey for Intermediaries.
Wilkinson suggested a new product should be invented to protect the UK's elderly population. A CI solution with a retirement option could, for example, help cover these people and address the problem of financing long term care (LTC).
Wilkinson told delegates that the product could ease the tremor of the 'agequake', which is soon to hit the country. "There has been a rapid increase in the elderly population. By 2052 the 65-85 year old age group will have increased by 41%. We need to look now at ways in which we can address this," she said.
Linking these statistics with the need for insurance cover, Wilkinson added that 45% of individuals over 65 are likely to suffer from a long-term illness.
With care home costs sitting at approximately £18,000 a year, Wilkinson warned of the implications of a lack of insurance cover. Increasing medical costs, minimal help from the State and withdrawal of pre-funded LTC schemes as well as insufficient pensions pots, means the need for insurance products for elderly people are more acute than ever.
"A total of 70,000 homes are sold each year to fund the cost of care in retirement. That is 25 years of hard labour to buy someone the home of his or her dreams, which could easily be snatched back by the need for long term care. We need to identify the fault lines or deal with the aftershocks," she warned.
In a separate seminar presented by Abbey for Intermediaries, delegates were also encouraged to make better use of technical support units. The provider's support service offers advice on issues such as taxation, trusts and legislation and also provides more practical support such as presentations, training and one-to-one meetings with IFAs.
Alan Savery, protection specialist at Abbey for Intermediaries, pushed advisers to take advantage of the service and revealed the unit is currently working on pensions simplification. He stressed however, that the unit does not answer questions on specific policies, quotations or underwriting issues.
